Project in detail

International Social Security Project: Incentive Effects on Early Retirement

Members of this project:

The project under the auspices of the National Bureau of Economic Research, (NBER) based in Cambridge, Massachusetts, is a long-term international research program led by Prof. Dr. Jon Gruber (Massachusetts Institute of Technology) and Prof. David Wise, Ph.D. (Harvard University), with the aim of scrutinizing interaction between social security schemes and retirement behavior. Researchers from altogether 12 western industrialized countries (nine EU states, United States, Canada and Japan) are involved in the study, with MEA representing Germany. One of the venture's central objectives is to present comparable surveys for each of the participating countries. Early retirement is a well-known and costly phenomenon in all these countries. Thus, findings obtained in the initial phase of this project have shown that early retirement incentives are indeed laid out in the German pension insurance system. The second phase seeks to estimate the extent to which such incentives affect the supply of older manpower. To that end, we use a variety of specifications and incentive variables. The results of these estimates are applied in the third phase to simulate the ramifications of stylized reforms for the German statutory pension insurance budget. We thereby ascertain the "mechanic effect" resulting from changes to fiscal variables at unchanged employment histories. At the same time, we quantify the "behavioral effect" arising from adjustments to the labor supply. The fourth phase inquires how early retirement affects the well-being of older persons, while the fifth highlights the effect of early retirement on the younger generation's job market opportunities. Finally, the ongoing sixth project phase is dedicated to the special incentive effects of disability pensions.

MEA Discussion Papers arisen from this project:

Publications arisen from this project:
  • Börsch-Supan, Axel; Schnabel, Reinhold (2010): Early Retirement and Employment of the Young in Germany, Gruber, J. and D. A. Wise, Social Security Programs and Retirement around the World: The Relationship to Youth Employment, University of Chicago Press, Chicago, 147-166
  • Börsch-Supan, Axel; Jürges, Hendrik (2009): Early Retirement, Social Security and Well-Being in Germany, Wise, D.A., Developments in the Economics of Aging, University of Chicago Press, Chicago
  • Berkel, Barbara; Börsch-Supan, Axel (2005): Patterns of retirement in Germany: How they emerged, and how to change them, Forneo, Elsa, and Paolo Sestito, Pension systems - Beyond mandatory retirement, Edward Elgar, Cheltenham, 81-106
  • Börsch-Supan, Axel; Schnabel, Reinhold; Kohnz, Simone; Mastrobuoni, Giovanni (2004): Micro-Modelling of Retirement Choices in Germany, Jonathan Gruber and David Wise, Social Security Programs and Retirement around the World: Micro-Estimation, University of Chicago Press, Chicago, 285-344
  • Börsch-Supan, Axel; Simone Kohnz; Reinhold Schnabel (2002): Micro Modeling of Retirement Decisions in Germany, MEA Discussion Paper 020-02
  • Börsch-Supan, Axel (2001): Incentive Effects of Social Security Under an Uncertain Disability Option, Wise, David, Themes in the Economics of Aging, University of Chicago Press, Chicago, London, 281-310

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